A veteran's view on marketing games

Ignore Nokia at your peril

In all the current excitement and hype about Android and the Apple iPhone and iPad people have seemed to lose sight of Nokia, this is a very silly thing to do. Nokia make about 40% (actually 39% last quarter) of all the mobile phones in the world, compared with Apple’s 2%. Nokia has 123,000 employees to Apple’s 35,000. Of the 52 million smartphones sold in the world in the last quarter 21 million came from Nokia, a 40% market share.

Who owns the smartphone market is headed to become the most important factor in all of technology for the foreseeable future. To explain why we need to go back to Moore’s law (again). This says that the number of transistors on a chip doubles every two years. Compound. This means that a given chip halves in cost or doubles in power every two years. This is easy to see in the price and capabilities of the game consoles, mobile telephones and computers we use every day.Other, lesser, components are not governed by Moore’s law. But we are at the beginning of a display revolution that will see complex, power hungry LCD displays replaces by simple, cheap, elegant OLED displays, which will drop prices further and faster.

There are companies that tear down these electronic devices to work out how much they cost to manufacture. Currently this is around $180 for a top end smartphone. So in 24 months time this could be $90. And due to the compound nature of Moore’s law this would be just $22 in 6 years time. You can see that at this price non smartphones have had their day. All new phones will be smartphones. And we are talking about a billion new phones every year.

A billion new smartphones is a billion new computers connected to the internet. It is also a billion new gaming machines. Every year. This is going to be revolutionary. It is going to put so much power and so much capability in the hands of so many people. It is going to totally dwarf the computing power in all the world’s desktop computers and it will make game consoles look like a small sideshow. It will be the biggest democratisation of knowledge and the means to use that knowledge in human history.

So if Nokia can hang on to owning 40% of this they will be the biggest computer company on earth. And if you look at what they are doing right now there is no reason why they won’t. They may lack the showmanship of Steve Jobs but they are more than making up for it with great products that people want.

It is not just the hardware. Nokia are covering their bets by having two different operating systems. Symbian is now open source so expect more rapid development to build on it’s ten years of development that make it the most fully features smartphone OS. Which is why it is on more smartphones than any other OS. Maemo is also mostly open source. It is a clean sheet of paper, state of the art, linux based OS and it is what drives the new N900.

Ovi is the online portal for Nokia smartphones, it is an App Store, an iTunes, a Google Maps, email, file storage and sharing service and so much more. It is where nGage now resides. Ovi is the most comprehensive suite of online services currently available for a smartphone.

By now you must be getting the message, if you are in the game industry you ignore Nokia at your peril. If you develop smartphone games they need to be on Ovi, not just Android and iPhone. And if you don’t develop smartphone games then you are going to miss out. Massively.

8 Comments

Interesting insights, Bruce. I did not think of comparison of cell phones to the realm of personal computing. I personally think that the gaming experience is impaired on smaller screens. But your point resonates. Ignore them at your own peril.

Good to see you started to refer to Moore’s Law in an appropriate manner now, that makes sense.

“A billion new smartphones is a billion new computers connected to the internet. It is also a billion new gaming machines. Every year.”

Whilst I agree with you that the emerging smartphone market is huge and only going to get a whole lot bigger you are wrong about assuming that because X amount of smartphones are sold that means the same number are going to be internet connected and used for games.

At present many smartphones are used by business people and people who don’t like playing games on them. Let’s face it, most people in the developed world would prefer to sit in their lounge using their full size screens, not their mobile phone – so if they do want to be playing games on their phones it’s when they’re travelling or waiting for something with nothing else to do.

I don’t really see how this market is going to have much effect on home gaming (consoles and PC). (For those that pay for games) mobile games simple cannot afford to be priced at the same level as console games as they are not used as much and are percieved, rightly or wrongly, to have much less value than a “full” console game. People can live without gaming entertainment on the way to work in other words much more than they can live without gaming on the couch – so I don’t see much money being taken away from non-mobile systems frankly. The experience simply isn’t the same and you don’t get the same fanatical following of avid gamers for mobile based games – at least not yet I supposed I should add, who know what the future will hold.

On the other hand, it is possible that every cell phone user could make one game-related purchase over the lifespan of that phone if the user experience is excellent (decent screen, processing power, etc.) and a sampling of high quality games is included for free. Even business types find themselves stuck at airports, etc., and need a break from the monotony of scanning headlines and e-mail.

Without any meaningful market share in North America or Japan, why would serious game developers create mobile games for Nokia phones? If I was CEO of a game publisher I would not invest on Symbian or Maemo before they get more popular in the developed world.

While Nokia smartphones have more market share in China then other brands, the problem is that Chinese do not want to pay for games. Too bad.

BTW, “Nokia Snake is on more machines than any other video game in the world.” So what?